I am writing in response to your February 11, 2005 request for an exception to the 1.0 percent statewide cap on the number of proficient and advanced scores from alternate assessments based on alternate achievement standards that may be included in adequate yearly progress (AYP) decisions. We appreciate your staff's willingness to provide additional information to us and to speak with us about this request.

Based on all the information provided by South Dakota, we are approving your request, within certain parameters, to receive a statewide exception to the 1.0 percent cap so that every district in the State with fewer than 200 students in the tested grades would be able to count up to two proficient scores (based on alternate achievement standards) when calculating AYP. This exception is granted for one year to cover AYP determinations based on assessments administered in the 2004-05 school year. The continuation of this exception beyond assessments administered in 2004-05 will depend upon a completing a successful peer review (and receiving the Department's full approval) of your State's regular and alternate assessment system. We appreciate your efforts to provide the peers with the necessary information about your assessment system for the May 2005 review.

We are granting your request for an exception based on South Dakota's rural nature. If a 1.0 percent limitation were applied to every district, about one-quarter of the districts in your State would not be able to count the score of a single student as proficient on the Statewide Team-led Alternate Assessment Reporting System (STAARS) when calculating AYP. In addition, because South Dakota has a large number of very small districts, a State-managed exceptions process for these districts could be administratively complicated. Based on data from the 2003-04 school year, 105 out of 169 districts had fewer than 200 students in the tested grades.

The exception is intended to address the unique nature of South Dakota's rural districts and is not an exception based on a higher incidence rate of students statewide. If you believe that your State has a higher incidence of students with the most significant cognitive disabilities, you may apply for an exception on that basis under the terms of 34 CFR §200.13(c)(2).

Districts that are eligible for this exception (i.e., the small districts) will be able to count in calculating AYP up to two proficient scores of students with the most significant cognitive disabilities who take STAARS.

Districts with more than 200 students in the tested grades (i.e., the large districts) would be held to an overall 1.0 percent cap on the number of students with the most significant cognitive disabilities whose proficient scores on STAARS can be included in calculating AYP, unless the following situation occurs. If students with the most significant cognitive disabilities who score proficient on STAARS in the State as a whole constitute less than 1.0 percent of students in the grades assessed, your State may grant exceptions under §200.13(c)(3) to districts that need them, up to the point where the total of proficient scores on STAARS of students with the most significant disabilities is equal to 1.0 percent of the number of students in the grades assessed statewide. If the group of districts with 200 or fewer students in the tested grades in fact have less than 1.0 percent overall of students with the most significant cognitive disabilities scoring proficient on STAARS, your State will have the excess, up to 1.0 percent of the small districts' number of students in the tested grades, available to grant exceptions that might be needed by other districts.

South Dakota has shown a commitment to raising standards for students with disabilities and to improving its assessment system. We wish you success in your efforts to ensure that all your students are held to high standards of student achievement.